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To: ThePythonicCow

we had a real deflation during the mid 90’s. A lot of companies went broke because they could not repay debts with dollars more valuable than those they had borrowed only a few years earlier. Money moved away from commodity based companies and 3rd world countries to high tech/service companies as their exposure to commodities was minimal. That’s why we had the dotcom bubble.


32 posted on 09/28/2008 1:28:44 AM PDT by ari-freedom (We never hide from history. We make history!)
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To: ari-freedom
Money moved around, companies went broke, and other companies got rich. Some third world countries had serious problems.

Prices of commodities and subsequently of goods that could be manufactured overseas were sharply lower throughout the 1990's, yes. But that's not deflation. There was plenty of money, just not in commodities and Wal-Mart dry goods.

Deflation is a general reduction in money supply, not the sloshing of it from one place to another. Or as I like to say it, overstating a bit, deflation is "no money, no how, no where." You have to go back to the 1930's, before we went off the gold standard, to find that.

40 posted on 09/28/2008 1:38:17 AM PDT by ThePythonicCow (By their false faith in Man as God, the left would destroy us. They call this faith change.)
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